Open AccessThe moderating role of board gender diversity between power-based corporate governance and tax aggressiveness
Author(s) -
Farzan Yahya,
Abdul Manan,
Muhammad Wasim Khan,
Muhammad Sadiq Hashmi
Publication year - 2021
Publication title -
economics and business letters
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.197
H-Index - 4
ISSN - 2254-4380
DOI - 10.17811/ebl.10.2.2021.104-147
Subject(s) - endogeneity , corporate governance , shareholder , sample (material) , diversity (politics) , power (physics) , business , corporate tax , accounting , gender diversity , tax avoidance , moderation , economics , econometrics , public economics , psychology , tax reform , social psychology , political science , finance , chemistry , physics , chromatography , quantum mechanics , law
The purpose of this study is to explore the moderating effect of board gender diversity on the relationship between power-based corporate governance (CEO power and concentrated ownership) and tax aggressiveness. The sample of this study is based on 2,071 firm-year observations over the period 2010 to 2018. We employed two-step GMM estimations to account for endogeneity and other statistical biases. The results show that CEO power increases the likelihood of tax aggressiveness while the link between the large controlling shareholders and tax-avoidance activities is not statistically significant. Lastly, the findings suggest that powerful CEOs manipulate female directors to promote tax aggressiveness behavior.